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Overdraft Privilege

What is Overdraft Privilege?

Overdraft Privilege is a discretionary overdraft service, requiring no action on your part, which provides you a safety net up to an automatically assigned overdraft limit.  Your Overdraft Privilege limit may be available for checks and other transactions using your checking account number or automatic bill payment and recurring debit card payments.  Also, at your request, we may authorize and pay ATM transfers or withdrawals and everyday debit card purchases using your limit.

Click here for the Overdraft Privilege Opt-In Form

How does Overdraft Privilege work?

As long as you maintain your account in “good standing,” we may approve your overdraft items within your current available Overdraft Privilege limit as a non-contractual courtesy.  For overdraft privilege consideration, your account is in “good standing” if you (1) make sufficient deposits to bring your account available balance to a positive end-of day balance at least once every 30 calendar days (including the payment of all credit union fees and charges); (2) avoid excessive overdrafts suggesting the use of Overdraft Privilege as a continuing line of credit; and (3) there are no legal orders, levies or liens against your account.

Understanding Your Account Balance for Overdrafts

Your checking account has two kinds of balances: the actual balance and the available balance.  We use your available balance when determining whether a transaction will cause your account to overdraw and for charging overdraft fees.  You can review both balances when you review your account online, at an ATM, by phone, or at a branch.

Your Available Balance

Your available balance takes into account holds that have been placed on deposits and pending transactions (such as pending debit card transactions) that we have authorized but that have not posted to your account.

Your Actual Balance

Your actual balance is the amount of money that is actually in your account at any given time.  Your actual balance reflects transactions that have posted to your account, but it does not include transactions that have been authorized and are pending.   While it may seem that the actual balance is the most up-to-date display of the funds that you can spend from your account, this is not always the case.  Your account may have purchases, holds, fees, other charges, or deposits made on your account that have not yet posted and, therefore, will not appear in your actual balance.

What does Overdraft Privilege Cost?

There is no additional cost associated with this privilege unless you use it.  You will be charged our paid item OD fee of $ 25 for each overdrawn item per your available balance created by a traditional paper-based check, a teller withdrawal, an automatic payment (ACH) transaction or a recurring debit card payment.  Also, if you have requested us to do so, we may authorize and cover ATM transfer or withdrawals and everyday debit card purchases.

For example, If your actual balance and available balance are both $ 100.00 and you swipe your debit card at a restaurant for $ 40, a hold is placed on your account and your available balance will be reduced to $ 60.  Your actual balance is still $ 100 because the transaction has not yet posted to your account.  If a check that you had previously written for $ 75.00 clears through your account before the restaurant charge is sent to us for processing, you will incur an overdraft fee.  This is because your available balance was $ 60 when the $ 75 check was paid.  In this case, we may pay the $ 75 check and charge you and overdraft fee.  The overdraft fee will also be deducted from your account, further reducing your balance.

Please note that the amount of the overdraft plus our paid item OD fee of $ 25 for each item will be deducted from you overdraft limit.  If the item is returned, the returned item NSF fee of $ 28.00 will be deducted from your account.  No interest will be charged on the overdraft balance

To help you manage your account, the total fees you have paid for items (both paid and returned) during the current month and for the year-to-date will be reflected on your monthly statement.

What is my Overdraft Privilege limit?  If I have two checking accounts, can I get Member Privilege on both?

The standard Overdraft Privilege limit is $ 500.  If you have multiple accounts for your household, you may only have one Overdraft Privilege limit established per eligible primary member.

How quickly must I repay my Overdraft Privilege?

You should make every attempt to bring your account to a positive end-of-day available balance as soon as possible, and must do so within 30 calendar days.  If you are not able to do so, you will receive a letter from Inner Lakes FCU informing you that your Overdraft Privilege limit has been suspended and additional items will be returned.

How do I know when I use the overdraft limit?

You need to be aware of what is in your account.  You can freely and easily access your account balance by obtaining internet access with our online home banking and mobile program, by calling our 24-hour automated voice response system, and/or by contacting us directly.  You will need to subtract the total fees when balancing your checkbook.

What are some of the ways I can access by Overdraft Privilege limit?  Will my limit be reflected in the balance I receive?

The chart below shows the different ways you can access your Overdraft Privilege limit and indicates whether or not this limit will be reflected in the balance provided.

ACCESS POINTS Is my Overdraft Privilege limit available? Does the balance provided reflect my Overdraft Privilege limit?
Teller Yes No
Writing A Check Yes N/A
Debit Card (recurring) Yes N/A
Debit Card (everyday) Yes* N/A
ATM Withdrawal Yes* No
ACH – Auto Debit Yes N/A
Online Banking Yes No
Bill Pay Yes N/A
Telephone Banking Yes No

*You will need to give your advance consent (opt-in) if you want us to authorize and pay overdrafts caused by ATM and everyday debit card transactions.  IMPORTANT:  If you do not give us your prior consent, your ATM or debit card transactions may not be authorized if you have insufficient funds in your account.

What if I go beyond my Overdraft Privilege limit?

Overdrafts above and beyond your established Overdraft Privilege limit using your available balance, may result in checks or other items being returned to the payee.  The returned item NSF fee of $ 28 will be charged per item and assessed to your account.

How soon can I use my Overdraft Privilege?

If you are a new member, you may be able to use the overdraft service 30 days after your account is opened, assuming your account is in “good standing”.

Questions and Answers:

Are there other Overdraft Options for your checking account?

Answer: Yes,

Inner Lakes Federal Credit offers two other overdraft protection products for our members’ checking accounts. 

  1. Saving Overdraft, which is when the checking account is linked to the member’s main share 1 account. (Automatically done at opening) If used, it will pull funds in increments of $ 25.
  2. Overdraft Loan, is a loan that members must be approved for through our lending department.   If used, it will pull funds in increments of $ 50.

What are the cost for each Overdraft products?

  1.  Savings Overdraft:  The member may receive two free transfers per month from their savings 1 account to their checking account, to cover non-sufficient funds available.   After the two free transfers the member will be charged a $ 10.00 fee per transfer thereafter.
  2. Overdraft Loan: If a member draws on their Overdraft Loan they will be charged a finance charge for the amount of the outstanding loan balance per the loan agreement.   With a monthly payment due.

What are holds on my checking account?

There are different types of holds that Inner Lakes Federal Credit Union my use that may affect you available balance.    Two of the main types of holds that a member may see are deposited check holds and debit card authorization holds.

What is a check deposit hold?

We use check deposit holds to help ensure deposited checks have the proper funds to cover them.   This helps protect both the member and Inner Lakes Federal Credit Union from possible loss that could result from returned checks, such as non-sufficient and fraudulent items.   The size of the check deposited may also determine the length of the hold, as a check over $5,000 may be placed on an extended hold.  For additional information on when your deposited funds will be available for withdrawal, see our Funds Availability Policy.  

What is a debit card authorization hold?

When you use your debit card to conduct a Signature or “Credit” transaction (i.e., you do not enter your PIN), the merchant sends us the amount, usually the purchase total, for authorization.  This amount is placed on hold and removed from your available balance immediately.  The hold is released after approximately 72 hours or when the transaction clears, whichever comes first.  The hold helps determine the available balance on your account.

How Transactions Are Posted to Your Account

There are two main types of transactions in your account: credits or deposits of money into your account, and debits or payments out of your account.   It is important to understand how each transaction is handled so that you know how much money you have available to use in your checking account.  The information below describes how we handle credit and debits to you account and the ruling impact on you available balance.  We many receive multiple deposit and withdrawal transactions on your account in many different forms throughout the day.  This means you may be charged more than one overdraft fee if we pay multiple transactions when your account is overdrawn.

Items are processed in the following manner; ACH Credit or Debits, ATM/Debit Card Transactions, Share Drafts, Bill Pay, and Mobile Check Deposits.  ACH transactions are processed as listed in the received files.  ATM/Debit Card Transactions are processed in real-time.  Share Drafts are processed as listed in the received files.  Bill Pay items are processed as listed in the received files.  Mobile Check Deposits are processed as listed in the received file; however, exceptions may occur.  Holds on funds and the order in which transactions are posted may impact the total amount of Overdraft Privilege Fees or Non-Sufficient Funds Fee assessed.

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